Keith Hudson's Musings

Teaching governments to be more modest

There are always cleverer people outside government than inside government simply because there are far more of them. So when governments raise personal taxes — or even proposes to raise them — then the social elite — who pay almost all an advanced country’s personal income tax anyway — put their thinking caps on. Or tell their expertise advisors to, anyway.

There are only two alternatives. One is to work less in order to earn less and thus to pay less taxation. The other is to find a legal way of avoiding taxation.

The social elite won’t work less because their sort of work — which, importantly, includes socializing — is much more interesting than most people’s work.

So that leaves tax avoidance. Governments ought to take notice that if they bring about another monetary disaster like the 2008 Crisis because of their slack supervision of banks, then the social elite — via the multinational corporations — might decide that they’ll start their own monetary system just to keep the wheels turning. Governments will have to learn to be more modest in demands in future years.